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GUATEMALA |
BONILLA,
MONTANO & TORIELLO |
REGISTRATION
OF FOREIGN COMPANIES IN GUATEMALA
Prepared
by Arturo Saravia Altolaguirre
Bonilla,
Montano & Toriello
Guatemala
With
the recent uproar regarding “FTAs” (Free Trade Agreements), our countries
must be prepared to handle the increasing number of foreign business interested
in “wetting their feet” in developing countries’ economies.
Since the mid nineties, when globalization suddenly became a big issue,
process that was accelerated by giant leaps in communications, Guatemala began
taking serious action to promote and facilitate investment.
These actions lost some momentum from 2000 to 2004, but have since
regained strength with the new government, in office since early 2004.
Strictly
regarding legal issues, Guatemalan law confers foreign investors the same basic
treatment as local ones.
Our Commerce Code, originally issued in 1970, has had few amendments, one
being in 1995, which acknowledges the same rights and obligations to foreigners.
Registration
of a foreign company in Guatemala must be done at the Mercantile Registry
(Registro Mercantil) by a Guatemalan Lawyer and Notary Public.
The
basic requirements for a foreign company (which includes all kinds of
incorporations or partnerships) to operate in Guatemala, are:
Proof
of being legally incorporated in their native country.
This includes a certified copy of the pertinent incorporation
documents, statutes, and any modifications.
Proof
of the decision, dully taken by the company, to establish business in
Guatemala.
To
issue a power of attorney with powers enough for the “agent” or
“Attorney-in-Fact” to fully act on behalf of the company and its
commercial activities in the country.
To
obtain a grant of no less than U.S. $.50,000.00 sustained for as long as the
company operates in the country, as a guarantee towards third parties, as
well as an express obligation to respond to any and all acts and business
done in the country, with all the company’s assets in Guatemala and
elsewhere.
Declaration
that the company, its employees or representatives will not invoke any
foreign rights, but are subject to the laws and jurisdiction of Guatemala.
Declaration
of compliance with legal requirements before leaving the country.
Certified
copy of last financial statements (general balance and
profit and loss statement)
Aside
from the documents originating directly from the maiden company, all other
requirements are complied with, by the Notary Public.
The
process of registration, once all documents are complete, takes one or two days
(provisional registration), time at which the company may legally begin
operations. The
remaining steps include one publication and an 8 work day standby time for third
parties to oppose the registration.
The fiscal registration can be made parallel to this and everything
should be completed within about 30 days, with the final or “definitive”
registration, and the “patent” issued.
As
appointed Registrar Mercantile for the country of Guatemala for the second time
(the first was from 1996-2000), I have the privilege to influence and work in
the modernization of this institution.
In the period 1996-2000 the aim was focused at leaving behind the
physical handwritten registration books, system that was in use since the
registry was born in 1970, and substitute it with an electronic registry, task
which was successfully done.
At the same time, re-engineering of procedures, digitalization (electronic
images) of these books, and the entry of all information into an
inter-relational data base, was accomplished, among other things.
This gave the clients a spectrum of new, much more efficient tools, in
addition to upgrading the security of the information and of course, the quality
of service provided.
The main goals now are a logical follow through:
Reinstating on-line information services as well as adding other
by-products, and continuing the effort to streamline the registration process
and make it as brief and secure as possible.
It
is worthwhile to comment that foreigners, as individuals, have no limitations
with regard to owning a Guatemalan company (individually) or being partners or
stockholders in any form of commercial organization, other than completion of
the registration process to which any local individual is subject.
For
further information on this topic please contact Arturo
Saravia Altolaguirre at Bonilla, Montano
& Toriello (asaravia@bonilla.com.gt)
